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Rakesh Jhunjhunwala made Rs 900 crore in 1 day on 1 share

Rakesh Jhunjhunwala’s mostly liked stock has made him wealthy by more than Rs 875 crore in a single trading session, after organisation shares surged yesterday on the back of stellar Q2 results. He holds more than 8.02% stake in the company as at the end of September quarter, translating to 715,86,220 shares, data filed with BSE showed. Titan scrip closed at Rs 657.4 on Friday, and surged to a 52-week high of Rs 824.65 before finally ending at Rs 780.3 on NSE on Monday. It is to be noted that he would have to actually sell his positions to realize the profits. Valued at closing price on NSE, his stake in the company translated to a little above Rs 5,500 crore. Just last month, Rakesh Jhunjhunwala had revealed in an interview that Titan is his favourite stock.

Titan Company Ltd had reported a tremendous 67% rise in net profit to Rs 277.93 crore for the quarter ended September 30, 2017 against Rs 165.98 crore in the corresponding quarter last year. Jewellery segment, which contributed nearly 80% of total revenue, has registered a solid 37% growth at Rs 2,748.20 crore on yearly basis, with its earnings before interest and tax growing 66.4%yearly. Despite such stellar numbers, Rakesh Jhunjhunwala quizzed the Titan Company management on an earnings call on Friday.

In the earnings call, the investor asked that Last year we saw a disturbed wedding season due to various new laws I understand you can’t forecast but there are many weddings this wedding season so would it be right to say that your sales in December and November growth should be much better as compared to this quarter?

The management responded, “Last year the entire festive season was in October. This year it got split between Q2 and Q3. There was 55% growth in that season, the base difference was high up to November 8. The base effect was high up to 8 November. After that, there was a trough and we got pulled back with our own exchange schemes.” Rakesh Jhunjhunwala also sought clarification on the wedding season in December and November, and whether it could lead to increase in growth in the coming quarter.

Rakesh Jhunjhunwala said that Last year we didn’t have rich wedding season and nor did we have a focus on the wedding as we have today. The management said that there was intense pressure from the government on the PMLA re-introduction. We don’t know how that is going to go and at what level they are going to cut it from Rs 50,000 and take it up to what level. The government had earlier said in a notification that the provisions of the Prevention of Money-laundering Act (PMLA), will apply to the gem & jewellery sector with immediate effect.

Jewellery business was impacted by the new PMLA regulations at the beginning of the quarter but the roll back, just before the festive season provided a boost to the business said Bhaskar Bhat, MD of Titan Company Ltd said on Friday. In the same concall, Rakesh Jhunjhunwala also asked the management how many shops Titan could open in the next 6 months. Titan’s management said, “We had a 180 store month target, my assessment is by the time March 31st happens we could achieve 80% of that target.”